German luxury house Hugo Boss has announced it has obtained a revolving 600 million euro syndicated loan with a sustainability component, meaning the interest rate is linked to the fulfilment of defined sustainability criteria.
The loan aims to provide the fashion group with financial flexibility to ensure the successful execution of its Claim 5 growth strategy.
The interest rate of the loan will be adjusted annually based on Hugo Boss’ achievement of target values across four ESG areas: the reduction of CO2 emissions, the share of women in management positions, fair working conditions and the use of more sustainable cotton.
Over its three year term, the loan will include two options to extend the term by one more year, with the extra possibility of increasing the credit amount by up to 300 million euros. It replaces the existing syndicated loan of the company, totalling 633 million euros.
Nine international banks comprised the loan syndicated, including Commerzbank and BNP Paribas as joint bookrunners.
Announced earlier in the year, the company’s Claim 5 strategy centres around boosting brands, a product-focused outlook, digital expansion, rebalancing omnichannel and organising for growth.
Additionally, Hugo Boss looks towards intensifying its sustainability efforts, with the goals of clear added value and developing emotional engagement with consumers.